PRODUCT STRATEGY AND BRANDING

1. PRODUCT STRATEGY AND BRANDING Professor Chip Besio Cox School of Business Southern Methodist University

2. What Is the Product?

3. Types of Products Consumer Industrial Other Entities Organizations Persons Places Ideas

4. Types of ProductsCONSUMER PRODUCTS

5. Types of ProductsINDUSTRIAL PRODUCTS

6. Characteristics of Services Can’t be seen, tasted, felt, heard, or smelled before purchase Can’t be separated from service providers Quality depends on who provides them and when, where and how Can’t be stored for later sale or use

7. Individual Product Strategy Decisions Attributes Packaging Labeling Product Support

8. Product Attributes - Where Do They Come From? Quality

9. Packaging

10. Multi-Product Strategy Decisions Branding Product Lines Product Mix Variety Assortment

11. What Do Brands Mean to Customers?

12. Brand Equity The value your customers perceive to be uniquely associated with your brand = Awareness + Associations Awareness Recall Recognition Associations Perceived Quality Image

13. Brand Awareness

14. Brand AwarenessRECOGNITION

15. Brand AwarenessRECOGNITION

16. Brand AwarenessRECOGNITION

17. Brand AwarenessRECOGNITION Free publicity in the Wall Street Journal

18. Brand AwarenessRECALL Essential for memory-based choice and customer-initiated contact

19. Brand AssociationsPERCEIVED QUALITY

20. Brand AssociationsIMAGE Brand image is the integration of all experiences with and information about a brand as perceived and remembered by customers The whole is more than the sum of its parts Brand image is relative easy to create, but almost impossible to change! Example 1: K-Mart and the “Blue Light Special” Example 2: Hyundai and product quality

21. Brand Equity ? BRAND LOYALTY Brand loyalty - the probability of choosing a brand given that you are a user of that brand - can result from: Inertia: the general tendency to repeat previous purchases due to high switching costs, convenience, or habit Preference: an enduring preference for a brand over and above what would be expected based on the benefits derived from the product or from a long-term relationship with the brand

22. ExampleBRAND LOYALTY In 1983, six people in Chicago died of cyanide poisoning from tampered TYLENOL capsules. J&J reacted quickly and appropriately withdrawing all capsules from the market. Tylenol shared dropped only from 37% to 35% and eventually recovered completely.

23. Brand Equity ?BETTER BUSINESS RESULTS Brands Price Market Share Toothpastes (6 oz.) Price Premium Share Premium Crest $2.19 $ .44 27.2% 17.3% Colgate $2.19 $ .37 21.8% 12.2% Aqua-fresh $2.19 $ .24 15.1% 6.6% Close-Up $2.14 $ .27 16.5% 8.0% SOURCE: Park, C. S. and V. Srinivasan (1994; based on survey results)

24. Brand Equity ?BETTER BUSINESS RESULTS Brands Price Market Share Mouthwashes (24 oz.) Price Premium Share Premium Scope $3.83 $ .47 31.2% 13.7% Listerine $3.79 $ .42 26.8% 11.1% Close-Up $5.02 $ .23 2.3% .8% Plax $4.29 $ .26 10.3% 3.4% Colgate $5.22 $ .10 1.4% .2% SOURCE: Park, C. S. and V. Srinivasan (1994; based on survey results)

25. Major Brand Decisions

26. Brand Strategy

27. Brand Strategy Line Extension Existing brand names extended to new forms, sizes, and flavors of an existing product category Brand Extension Existing brand names extended to new product categories Multi-brands New brand names introduced in the same product category New Brands New brand names in new product categories

28. Brand StrategyBRAND EXTENSION Brand associations determine which brand extensions will be successful

29. Brand StrategyBRAND EXTENSION

30. Brand StrategyBRAND EXTENSION

31. Product Mix